Earnings Beat: PulteGroup, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

PulteGroup, Inc. (NYSE:PHM) defied analyst predictions to release its quarterly results, which were ahead of market expectations. PulteGroup delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$3.9b-10% above indicated-andUS$3.10-31% above forecasts- respectively Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for PulteGroup

After the latest results, the 13 analysts covering PulteGroup are now predicting revenues of US$17.2b in 2024. If met, this would reflect a satisfactory 4.7% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$12.99, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$16.9b and earnings per share (EPS) of US$11.87 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$131, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values PulteGroup at US$183 per share, while the most bearish prices it at US$105. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await PulteGroup shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PulteGroup's past performance and to peers in the same industry. We would highlight that PulteGroup's revenue growth is expected to slow, with the forecast 6.3% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. Compare this to the 91 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.1% per year. Factoring in the forecast slowdown in growth, it looks like PulteGroup is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PulteGroup following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$131, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for PulteGroup going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - PulteGroup has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.